Creditors of Mt Gox – a former Japanese Bitcoin exchange – have finally agreed to a rehabilitation plan after seven months of voting. Mt Gox was reportedly hacked in 2014, losing thousands of its customers’ held Bitcoin. The plan will return a fraction of those bitcoins to its customers, which still amounts to over $9 […]
Creditors of Mt Gox – a former Japanese Bitcoin exchange – have finally agreed to a rehabilitation plan after seven months of voting. Mt Gox was reportedly hacked in 2014, losing thousands of its customers’ held Bitcoin. The plan will return a fraction of those bitcoins to its customers, which still amounts to over $9 billion.
Rehabilitation On The Way
As indicated in a report released earlier today, the rehabilitation plan was approved almost unanimously by over 99% of creditors. The plan was first filed in February 2021 but voted upon by creditors today at the Tokyo District Court.
The confirmation order of the plan is expected to become final and binding in November of this year. After that, Rehabilitation Trustee Nobuaki Kobayashi will be obligated to repay creditors their agreed claims. Details on the specific timing, procedures, and amount of these payments are yet to be announced.
As detailed in the report, creditors will be required to register their bank account information in an online system to get paid. $1.7 billion is expected to be paid in fiat, while another $9 billion may be paid in Bitcoin. Some creditors will be compensated with a share of 142 000 Bitcoin Cash tokens held by Kobayashi.
Creditors can elect to receive up to 90% of the Bitcoin the exchange owes to them under the proposal. This same Bitcoin is worth tens of times more than what they were in 2014. Therefore, the upcoming repayment to creditors is likely to make many people quite rich. Bitcoin’s price reached an all-time high earlier today, so there is no better time to be compensated in BTC.
Tremendous Amounts of Money
As of September 2019, trustee Kobayashi held 141,686 Bitcoins, alongside cash and Bitcoin Cash, on behalf of clients. This was more than five years after the exchange lost over 850 000 bitcoins after an alleged hack. 850 000 Bitcoin is about 4% of Bitcoin’s maximum supply. It was about $500 million worth at the time of the hack, and over $55 billion worth today.
Avi Felman – a portfolio manager at BlockTower Capital – believes the day the bitcoins are returned to their creditors could see a major market event.
“It’s a date every market participant needs to keep their eye on. [There] will likely be significant volatility around the event, and if Bitcoin is overheated, it could mark a local top as holders finally are able to take profits on their positions.”
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